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July 30, 2011

Much ado about default

We now hear so many noises about the prospect of default.
I remember the true default in Russia in August 1998. At that time companies did not have cash to pay to each other, so they went to "barter" of goods and services.

This time, if financial transactions ever be disrupted, then the following measures may be possible--Do not take me serious, I am just cynical and even desperate.

1.Issue of "coupon"
If financial mechanism be disrupted and the amount of the cash flow becomes insufficient, then some NPO may issue "coupon", a certificate for eventual payment in dollar.

2. "SDS" instead of "CDS"
Everyone knows that there is CDS (credit-default swap), but I am now dreaming about a new system SDS (smart default system), in which individual and corporal liabilities and assets are negated with each other. This is effectively a huge barter system with use of super computer. With this system the government may be able to save almost the entire budget.


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